Public and private providers to get equal funding under new law

Tertiary Update Vol 20 No 4

Private tertiary education companies will receive the same funding as universities, polytechnics and wānanga under the provisions of a new law introduced in Parliament this week.

The law, which amends the Education Act, means that for-profit private tertiary education providers (PTEs) that seek to maximise profits will be treated equally with those that do not; universities, ITPs and wānanga.

Provisions in the legislation would also make funding more flexible enabling the minister to more easily move public money around the tertiary sector in response to market demand.

Framed as an attempt to create a more level playing field, the legislation lays the foundation for the next phase of market expansion in tertiary education.

Sandra Grey, TEU national president, reacted with alarm at the proposals.

“These changes will undermine our public education system, paving the way for the transfer of large sums of money away from the public tertiary education sector into the pockets of private companies.

“Success in tertiary education is not in increasing a business’s bottom line but the delivery of broad-based, publicly-funded programmes that meet community, iwi and hapū, business, industry and service provider needs.”

Whereas the bill does strengthen monitoring and compliance of private providers, Grey argues it is the use of market-based approaches that has created an environment where such mechanisms are necessary.

“It is sensible to monitor how taxpayer money is being spent but the level of compliance this law demands is necessary only because the government is expanding the profit-driven marketplace at the same time as cutting funding to public institutions. This leads to all manner of perverse behaviours that needed to be monitored.”

In a subtle attempt to disguise the profit motive of some tertiary education providers, the bill also proposes renaming private tertiary establishments (PTEs) as independent tertiary establishments (ITEs).

“We recognise that private provision of tertiary education covers a variety of ownership arrangements, but this change is attempting to distract attention away from the motives of those that put profits above their educational focus,” Grey said.

The TEU has argued that it would be more appropriate to make clear distinctions between private for-profit companies and community run not-for-profit enterprises.

The bill is expected to receive its first reading in the next few weeks, after which it will be subject to a vote of all MPs to determine whether it will proceed to the next stage of legislative scrutiny.